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Essential Finance Secrets For Entrepreneurs November 4, 2009files.meetup.com/357912/Entrepreneur &...
Transcript of Essential Finance Secrets For Entrepreneurs November 4, 2009files.meetup.com/357912/Entrepreneur &...
Entrepreneur & Small Business Entrepreneur & Small Business AcademyAcademy
Essential Finance Secrets For Entrepreneurs
November 4, 2009
Quick BioQuick Bio
Steve Peterson• 1995 Co-founder Whole Earth Networks
– Bay Area Internet Service Provider • 2002 Co-founder SentryTrack
– ASP provider for water and waste water industry• 2007 Co-founder webKPI
– Financial dashboard reporting
WeNET
Raised $30 million in Equity Raised $30 million in Equity and $10 million in Debt forand $10 million in Debt for
• Whole Earth Networks• Vitallink Business Systems• Trymedia• Access Information
• CFO for Borelli Investment Company
WeNET
Best Entrepreneurs Know the FollowingBest Entrepreneurs Know the Following
• No secret formula for success• Luck can have an effect in being at the
right place at the right time• Learn from making mistakes, falling
down, picking ourselves up and figuring out how to do it right next time
Rules To FollowRules To Follow
1. Numbers Run a Business – If you don’t know them, you are flying blind
Rules To FollowRules To Follow
1. Numbers Run a Business – If you don’t know them, you are flying blind
2. A Sale is Not a Sale until you Collect
Completion of a promise is paymentCompletion of a promise is payment
Rules To FollowRules To Follow
1. Numbers Run a Business – If you don’t know them, you are flying blind
2. A Sale is Not a Sale until you Collect3. When Short Term Liabilities Exceed
your Short Term Assets, you are Bankrupt
Current RatioCurrent RatioLooks at your ability to meet obligations Looks at your ability to meet obligations
maturing in the next 12 monthsmaturing in the next 12 months
Rules To FollowRules To Follow
4. Forget Shortcuts. Run a business as if it’s forever
Run a business as it is foreverRun a business as it is forever
• Company needs time to develop• Diversified base of loyal customers• Experienced managers• Vibrant culture• Efficient systems• Sales force
Shortcuts only prolong the process of building a great company
Rules To FollowRules To Follow
4. Forget Shortcuts. Run a business as if it’s forever
5. Cash is hard to get and easy to spend. Make it before you spend it
Rules To FollowRules To Follow
4. Forget Shortcuts. Run a business as if it’s forever
5. Cash is hard to get and easy to spend. Make it before you spend it
6. You have no friends in business, only associates
FriendsFriends
• Don’t do business with friends• Friends expect special treatment or
exceptions
You could lose a supplier and a friend if relationship goes south
Rules To FollowRules To Follow
7. Don’t focus on the top line. Gross Margin is the most important number
Gross MarginGross Margin
• Everybody obsesses on sales initially• Yet you have to pay your expenses out of
gross profit• If you gross margin is 10%, you need $10
in sales for every $1 of overhead just to break-even. If gross margin is 40%, you need only $2.50 in sales.
Rules To FollowRules To Follow
7. Don’t focus on the top line. Gross Margin is the most important number
8. Know your competitors
CompetitorsCompetitors
CompetitorsCompetitors
Rules To FollowRules To Follow
7. Don’t Focus on the Top Line. Gross Margin is the Most Important number
8. Know your competitors 9. Culture drives a company
Rules To FollowRules To Follow
7. Don’t Focus on the Top Line. Gross Margin is the Most Important number
8. Know your competitors 9. Culture drives a company10. Life plans come before business plans
Business BlundersBusiness Blunders
1. Not Controlling Cash1. Poor record keeping2. Not reviewing Financial Statement trends3. Not controlling receivables4. Loading up on inventory5. Short or inadequate financing
2. Poor Marketing1. Not focusing on customer feedback2. Not talking about your product every chance you
get
Business BlundersBusiness Blunders
3. Respecting your value1. Don’t compete on price 2. Charge a nominal fee vs. Free. – If free, show the
value on the invoice provided and limit time available
3. Ask customers for referrals
4. Fail to fulfill promises1. Don’t Oversell2. Under commit and over deliver
Business BlundersBusiness Blunders
5. Unrealistic expectations1. Inadequate planning2. Trying to do all yourself
Types of Business PlansTypes of Business Plans
• One Page Business Plan• 3-5 Page Executive Summary• 20 Page Business Plan
One Page Business PlanOne Page Business Planhttp://http://www.onepagebusinessplan.comwww.onepagebusinessplan.com//
Secret is SimpleSecret is Simple
• It’s not hard work and long hours, it’s acting like a CEO
• CEOs expect a payoff• Millionaire entrepreneurs focus on business
practices that create the biggest results• Once you make the investment in time, money
and resources, make it profitable or ditch it.
Growing a business requires learning every Growing a business requires learning every day from available resourcesday from available resources
Club Auto Sport Fast Lane to Clean Technology Club Auto Sport Fast Lane to Clean Technology IncubatorIncubator
Nov 18Nov 18thth 5:30pm5:30pmhttp://clubautosport.net/eblast/11.09_CAS_Fast__Lane_U/CAS_Fast_http://clubautosport.net/eblast/11.09_CAS_Fast__Lane_U/CAS_Fast_Lane_U.htmlLane_U.html
Team Club Auto Sport
QuickBooks and Business Coaches
Guest SpeakerGuest Speaker• Author of two books• Organizer of the Entrepreneur & Small Business
Academy with 1,500 members• Founder of Tactical Execution; an internet marketing
company that leverages cutting-edge strategies to build credibility and exposure for its clients.
• Patrick is an inspiring speaker who has given keynotes and workshops in the United States, Canada and Europe. At latest count, his podcasts have been downloaded over 50,000 times in 27 countries and his articles have been published on thousands of different websites.
Contact: Steve [email protected]